ANZ's decision to make a large release of funds from a management overlay in its collective provision was the most contentious aspect of the bank's 2011/12 financial report, which was released last week. UBS and JP Morgan questioned the bank's management of its collective provisions.ANZ reported a net profit of A$5.66 billion in the year to September, which was an increase of six per cent over the profit of $5.35 billion it made in the previous financial year. On an underlying basis, profit rose six per cent, from $5.6 billion to $6 billion. Underlying ROE fell from 16.2 per cent to 15.6 per cent.The provision for credit impairment was down three per cent, from $1.23 billion in 2010/11 to $1.19 billion in the latest result. JP Morgan said the bank needed to be more cautious with its bad debt provisioning. The bank released $272 million in management overlays during the year. JP Morgan said: "Our current forecasts call for a greater degree of caution."UBS also questioned the bank's provisioning policy. It said: "While some of this [the overlay release] appears [to be] a legitimate transfer to specific provisions for high profile [corporate] losses, bad debt charges would have been 45 per cent higher if overlays had not been run down."Of the $272 million released, $185 million resulted from the crystallisation of a couple of large corporate losses. Another $31 million related to a flood overlay.UBS said: "The residual $56 million released from the overlay appears difficult to comprehend, given the deteriorating economic outlook and management's cautious statements regarding the environment. ANZ's collective provision balance is now at the lower end of [its] peers."On the positive side, Citi said systems upgrades and lower costs in Asia had put ANZ in a strong position to achieve some growth through acquisition. It can now start to generate scale economies in its Asian businesses.Goldman Sachs said that the bank's development in Asia and its focus on tighter cost control were Buy signals. ANZ said it expected a two per cent fall in its cost-to-income ratio over the next two years. The bank is focused on costs. Goldman Sachs said: "Longer term, the outlook is positive, with growth in high-return segments of its institutional business. "We estimate that ANZ can achieve growth in operating profit above its peers in 2013 and 2014 based on its targeted reduction in its cost-to-income ratio and expected revenue growth of four per cent a year."Citi and Goldman Sachs rate ANZ a Buy. JP Morgan has maintained its Neutral recommendation and UBS left its Sell recommendation unchanged.